The Bank of Tanzania (BoT) Governor Professor Florens Luoga has urged Tanzania to tread carefully on the issue of tax exemptions offered to potential investors urging that the vice was not healthy for growth of the country’s economy.
“As a matter of fact, there are a lot of tax exemptions and this is not good for the growth of our economy. We already show our commitment by providing the required security, skilled labour and we provide a well-built system of incentives to investors right from day one for instance on capital goods, we provide guarantees in terms of repatriation of profits and all these are systems to assist investors,” he said.
Prof. Luoga made the remark while presenting a paper on issues of Finance and Africa Development in a futuristic context during the opening of the three day 13th Mwalimu J.K Nyerere Centennial Intellectual Festival held at the UDSM Library auditorium on Monday under the theme, ”Africans after Mwalimu J.K Nyerere Century 1922-2022: Reflections on the present and the future”.
He added, “It takes courage and determination from the Government to implement such reforms when it comes to tax matters. I remember when we introduced the mining sector reforms, it was not that easy but later on, companies complied and these reforms are now bearing fruits in form of more Foreign Direct Investments (FDIs)”
Prof. Luoga further urged that as part of efforts to increase the country’s tax base, it was equally important to integrate the informal sector into the formal sector by leveraging on the opportunities brought about by growth of the Information Communication Technology (ICT).
He noted that Tanzania needsto embark on an aggressive domestic resource mobilization strategy by identifying and coming up with new tax sources so as to diversify and increase the country’s tax base.
He added that there was need for the Government to undertake deliberate efforts to increase the current taxable population from 1.5 million people to at least 10 million people that will help in increase revenue collection targets.
“We need devise means to ensure that more revenue is collected by ensuring that the imposed revenue is collected. As a country we need to come up with diversified revenue sources,” he said.